Dwolla Debuts Real-Time Credit Product

Dwolla, the Des Moines, Iowa, payments innovator, has announced rollout of a new credit product that will allow approved customers to access credit and spend it online at a network of merchants.

"Credit is not new, but providing it on a real-time network that replaces interchange fees and positions credit to evolve is, and that's what Dwolla Credit does," said Ben Milne, CEO and founder of Dwolla, in a prepared statement. "Dwolla Credit places millions of dollars in immediate buying power right at the fingertips of a network at a transaction cost that's next to nothing and in a way that's as simple as logging into your email."

Traditional interchange charges are replaced in Dwolla Credit purchases with a flat 25-cent fee (and transactions under $10 are free).

Dwolla has announced a lineup of participating online merchants who are indexed on the company’s storefront. Included are delivery service WunWun, WiFi hotspot provider Karma, and Hugh & Crye, a Washington, D.C.-based online retailer of gentlemen’s clothing.

In the press statement, James Wester, research director of global payments at IDC Financial Insights, said, "It's a 21st century world out there, so there's a push for a real-time payment method that settles a transaction between a merchant and customer immediately but at a much lower cost."

Presently in what Dwolla calls a “beta” stage, Dwolla Credit is slated for broad rollout in early 2014.

Dwolla, with support from CUSO The Members Group, has long had high visibility among credit unions. The $2.4 billion Waterloo, Iowa-based Veridian has for some months offered its members payments tools via Dwolla.